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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2018 (CONTINUED)
17. Risk Management (continued)
(d) Liquidity risk
Liquidity risk is the risk that the Group may not have the necessary funds to honor all of its financial commitments including claims. All ‘other liabilities’ are due on demand and claims are payable on the occurrence of the claims, which principally results in short-term cash outflows. The remaining general insurance liabilities could result in cash outflows within one year.
The Group manages its liquidity risk by maintaining an appropriate level of liquid assets (principally cash at banks and term deposits), which mature or could be sold immediately to meet cash requirements for normal operating purposes. Except for certain investments in securities (Note 5), investment property and property, plant and equipment, all assets could result in cash inflows within one year.
Financial Liabilities
as at 31 December 2018
Outstanding claims reserve Cash advance from reinsurers Due to reinsurers
Accounts payable
and accrued expenses
Total
Financial Liabilities
as at 31 December 201
Cash Flows
< 1 year 1-5 years > 5 years Total $$$$
5,938,099 – 4,344,644
2,497,095
12,779,838
45,405,956 – –
–
45,405,956
794,971 – –
–
794,971
52,139,026 – 4,344,644
2,497,095
58,980,765
–
7< 1 year
$ $$$
Total
218,183,911 46,608 6,559,607
7,477,624
232,267,750
Outstanding claims reserve Cash advance from reinsurers Due to reinsurers
Accounts payable
and accrued expenses
52,073,777 46,608 6,559,607
1,452,475
164,821,286 1,288,848 – – – –
6,025,149 –
170,846,435 1,288,848
Total 60,132,467
(e) Interest rate risk
Interest rate risk is the risk that the fair values or cash flows of financial instruments may fluctuate significantly as a result of changes in market interest rates. The Group’s exposure to fair value interest rate risk is considered minimal as its interest-bearing financial instruments for the most part have short terms to maturity or interest rates that periodically reset to market rates.
Cash Flows
1-5 years > 5 years
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